Renewable Energy Laws Mostly Hot Air

Creating Laws Doesn't Create Results, Says NCPA's Burnett

DALLAS (August 30, 2007) - Laws requiring the use of renewable energy by utility companies in an effort to lower greenhouse gas emissions are more likely to increase energy costs, according to H. Sterling Burnett, senior fellow with the National Center for Policy Analysis (NCPA). Despite their poor track record, 25 state legislatures have passed these laws, and Congress is considering a national measure.

"Not one of these legislators can actually build a wind turbine, or construct a solar panel," said Burnett. "It's good to have goals, but more than 1/3 of the states that have renewable energy goals are failing to meet their targets.  While they have failed to meet their targets, they have succeeded in increasing the cost of energy."

According to Burnett, part of the problem is the demand for the equipment used to harvest renewable resources. The backlog of orders for wind turbines alone has reached a three-year wait. That means the price per turbine goes up. As a result, the energy produced by the existing turbines costs more to cover the ever-rising prices of the equipment on order.

"It's simple economics. When demand goes up, and supply can't expand as fast, price goes up," said Burnett. "This is what happens when government gets involved in energy markets; they create an artificial politically-motivated demand and let rate-payers pay the piper. Undoubtedly, the politicians who created the problem will then blame industry for skyrocketing energy costs.

"In the end, there are three outcomes possible: energy consumers pay through the nose, taxpayers end up subsidizing the construction or the purchase of 'green' energy from other areas, or states will have to adjust their goals downward while allowing a more generous timetable. The bottom line is renewable energy is a long way off from being as cheap and reliable as politicians promise. They want to spin gold from straw by just saying it should be so."